January 2006
Introduction
i What are the initial notices?
As the name suggests, the initial notices are the first official letters sent out by the official receiver to interested parties, notifying them of the insolvency order and the official receiver’s involvement in the proceedings. They vary in format but all of them must be issued promptly.
ii To whom are they sent and why?
They are sent to a whole range of organisations, such as: district judges, High Court Enforcement Officers, local authorities and various other interested parties, e.g. regulatory, professional or licensing bodies, so that they can note their records accordingly and put their own procedures for dealing with insolvencies into operation.
iii What happens when an insolvency order is made on a creditors petition?
The court is required to give the official receiver prompt notification of the making of a bankruptcy or winding-up order, this will normally be done by fax.
The Petitions and Transfer Team (of London Region) are responsible for monitoring petitions and allocating the insolvency cases originating in the High Court and its district registries. A member of the official receiver’s staff from the Petitions and Transfers Team will attend the hearing of company petitions at the High Court which is held every Wednesday. The winding-up orders made are recorded on LOIS and transferred to the appropriate official receiver's office. This is determined by the company's trading address (where provided) or in the absence of this information by reference to the last registered office The Petitions and Deposits Team of OR Banking Section, HQ Birmingham are responsible for entering information of all deposits received onto LOLA. Each official receiver is sent an e-mail containing details of the creditors petitions received and entered onto LOIS.
Once notification of a creditor's petition bankruptcy or winding-up order has been received, enquiries into the affairs of the bankrupt/company/partnership must begin immediately. This early stage is known as ‘initial enquiries’. For more information on this subject please refer to the Case Help Manual part: Initial Enquiries.
iv What happens when a bankruptcy order is made on a debtor's petition?
In cases where a bankruptcy petition was presented on or after 1 April 2004, debtors presenting their own petition are required to complete a comprehensive statement of affairs which is filed at court. The official receiver must contact the bankrupt to obtain essential information pending the arrival and initial review of the debtor's statement of affairs. This procedure is known as "initial contact" and will replace initial enquiries in debtor's petition cases only. For more information on this please refer to the Case Help Manual part: Initial Contact in Debtor's Petition Cases.
Where the debtor has completed his/her statement of affairs using the online forms service the court should be asked for the 3 to 10 digit reference number on the top right hand corner of the form as this will enable certain case information to be downloaded onto LOIS. For further information please refer to the LOIS workbook Online Forms Service and LOIS available from OROS intranet page.
v Checking details of the order
Care has to be taken when recording details of the order made as the official receiver will be liable for any errors made in advertising the order. Details of the order should be checked carefully (with the contents of the petition where available) to ensure complete accuracy. For instance, the company name must be identical to that which is registered with Companies House and bankruptcy descriptions must never include:
vi Allocation of the case
Every order that is made will be allocated to an examiner and a case officer (normally an A2) using a system appropriate to each local office.
vii Gazetting and Advertising
Once an order has been made, the official receiver is required to publicise it by placing a notice in both the London Gazette and in a local newspaper. The notice in the London Gazette is placed through Headquarters, Birmingham and is known as gazetting. The official receiver advertises the order in a newspaper using agents employed for this purpose. For more information on this process please refer to the Case Help Manual part: Gazetting and Advertising.
viii Companies House
Companies are required to file certain documents with the Registrar of Companies and these documents will include such information as the date of incorporation, registered office address, objects (found in the articles of association), names and addresses of the company’s officers and accountants, etc. All official receivers’ offices have direct access to Companies House computer database where the details are stored. When a winding-up order is made, the official receiver may access Companies House direct to acquire the relevant preliminary information of an insolvent company.
ix Individual Insolvency Register
All details recorded in the subject information screen on LOIS are downloaded to the Individual Insolvency Register (IIR). When an order is made, a search should be made of the IIR against the name(s) of the bankrupt, partner or company officers, to ascertain whether they have been previously made bankrupt and/or are subject to an individual voluntary arrangement. Any findings should be reported to the B1/examiner dealing with the case.
x Disqualification Checks
It is standard practice following the making of a winding-up order, to check if a company officer is or has been disqualified from acting as a director. Disqualification checks may be made with Companies House, which is responsible for maintaining the Register of Disqualified Directors. The register records details of all current disqualification orders made in England and Wales.
Bankrupts should only be checked against the register when there is good reason to suggest that the search will reveal something useful.
Checks are made using the Companies House computer database, by selecting “director/secretary based enquiries” from the main menu and then selecting Disqualified Directors. Once the name is typed onto the screen, details of any disqualification order against the individual are displayed. There is no charge for this service.
xi Notification to High Court Enforcement Officers and Court
November 2007
High Court Enforcement Officers (formerly known as Sheriffs and Under-Sheriffs) are no longer bound by geographical restrictions and may accept instructions to act in any part of the country where they have chosen to carry on business. Consequently, there is no longer any certainty about exactly which High Court Enforcement Officer (HCEO) will hold any High Court writ of execution. They have a central register and database, ‘NICEShefiffs’ containing information relating to the execution of High Court writs, set up by the High Court Enforcement Officers Association.
Registry Trust Limited are now the owners of the ‘NICESheriffs’ database, to which The Insolvency Service (the Service) forwards, by electronic notification, details of all insolvency orders made. There is no need to routinely forward by post form NTSH, LOIS (DO73) ‘Notice to sheriff ‘
The initial notice form NTSH, informs the HCEO of the making of the order and asks that they hold any goods still in their possession to the order of the official receiver or, where the goods have been sold, instructs them to hold the sale proceeds to the official receiver’s order. In return, their costs incurred in levying execution are a first charge on the proceeds of the sale.
However, should rule12.19 of the Insolvency Rules of 1986 apply, (Execution overtaken by judgment debtor’s insolvency), rule 12.19(2) requires that notice shall be in writing and delivered by hand at, or sent by recorded delivery to the HCEO dealing with an execution.
It has been agreed with Registry Trust Limited that if the electronic notification will not be accepted as the appropriate notification by the relevant HCEO, the ‘NICESheriffs’ system will generate an alert to Registry Trust Limited. The official receiver will then be requested to send form NTSH, LOIS (DO73) to the HCEO acting in the execution. In that way goods and money will be preserved for the insolvency estate.
The address for delivery of written forms NTSH is, NICESheriffs, Registry Trust Limited, 173-175 Cleveland Street, LONDON, W1T 6QR, or DX 137592, EUSTON 4 DX.
The district judge of the county court for all areas in which the bankrupt/partner is known to have carried on business or resided in the last six months should be sent form NTSH, LOIS (DO73) accompanied by a schedule of executions levied form. The schedule should be completed and returned by them to show whether any goods/monies were seized on behalf of a judgment creditor over which the official receiver may have a claim.
xii Notice to HM Land Charges Department, Plymouth
In accordance with the Insolvency Rules, statutory form 6.26 (Application for registration of a bankruptcy order against an individual under the Land Charges Act 1972) must be sent to the Chief Land Registrar as soon as possible after the making of the bankruptcy order. The Land Charges Department should record the bankruptcy order in the register of writs and orders and confirm registration by sending an acknowledgement to the official receiver quoting a WO(B) number.
HM Land Charges Department (LCD) is also responsible for registering a bankruptcy restriction against any property solely owned by the bankrupt. For more information on this subject please refer to the Case Help Manual part: Freehold property: Solely owned - Registration of a bankruptcy restriction.
The official receiver must also inform the LCD of any subsequent amendment to the description or title of the proceedings, by completing a LRRABO form confirming the new details to be recorded in the register. For more information on this subject please refer to the Case Help Manual part: Application to Amend Description.
Please note that a notice will not normally be sent to the Land Registry in the case of a winding-up order.
xiii Notice of Winding-up order to Companies House
Insolvency legislation requires the official receiver to notify the Registrar of Companies of any winding-up order made. However this does not apply to unregistered companies, friendly societies, or partnerships, please refer to notes: a and b.
The official receiver should receive three sealed copies of the winding-up order from court. The order should be served by first class post as follows:
The final copy should be retained by the official receiver on the office file.
Where the official receiver has received only one copy of the winding-up order from the court, it has been agreed with Companies House that they will accept a copy of the sealed order but only if it is a good copy and is legible.
xiv Letter to director
The official receiver should send form NTCO (Notice to Company Officers) to the director(s) of the company. There are two options available to staff when printing the letter. The letter may be sent to Company Officers where their attendance is or is not required by the official receiver. Where the director's attendance is required an appointment time should be specified in the letter. Where a member of the official receiver’s staff has already spoken to the officer, the appointment may have already been made for a mutually convenient time and the letter will serve as written confirmation. Otherwise, the appointment can be made at a time to suit the official receiver’s staff.
The letter is also appropriate where it has been decided that the officer's immediate attendance is not required at this point in time but may call upon him/her to attend at a future date. The letter must be accompanied by the “Guide for Directors” information booklet.
In the case of an appointment letter, the following should also be included:
xv Letter and enclosures to bankrupt
The appropriate appointment letter should be sent to the bankrupt as soon as practically possible. The type of letter to be sent depends on the circumstances of the case. The appointment letters available are:
Each of the above forms will list the relevant enclosures that must accompany the letter to the bankrupt. As a minimum, the following must also be given either personally or sent to the bankrupt:
The official receiver is required to give or send two copies of form NTB2 to the bankrupt, the purpose of which is to ensure that he/she is aware of a number of duties and responsibilities required. The form also points out the bankruptcy restrictions which must be observed until discharge is obtained and certain other parts of the legislation which apply to the bankrupt. The bankrupt must sign, date and have witnessed one copy of the form and this must be returned to the official receiver. The official receiver should file the returned copy in court. The other form acts as the bankrupt's copy and as such should be kept by him/her. This form is significant as it informs the bankrupt of the various bankruptcy offences and of his/her duty to disclose after-acquired property. Should the bankrupt subsequently commit any bankruptcy offence, the copy of the signed form NTB2 filed at court is evidence that the bankrupt has been served with the form and should therefore be aware of the bankruptcy constraints.
xvi Letter and enclosures to partners
The main partner in each partnership should be given responsibility for completing form L75.05, the partnership preliminary information questionnaire. This is in addition to those partners who have been made bankrupt being required to complete a separate bankruptcy preliminary information questionnaire, form B40.01. Notice of the order to partners may be adapted to suit the type of partnership that is being dealt with, e.g. form NTCO (Notice to Company Officers) may be amended to accommodate a partnership in liquidation. The appropriate bankruptcy forms should be used for those partners who have been made bankrupt.
xvii Local utilities other than water services – notice not normally required
(Amended June 2008)
There is no longer a monopoly operating for the supply of gas, electricity and telephone services, to any premises. The providers of these utilities are now private companies and in most areas of the country there are multiple service providers, i.e. those who can supply both electricity and gas to premises, etc. This makes it difficult in the early stages of a case to identify which supplier dealt with the insolvent.
There is no reason why the utilities should be treated in a different manner to any other trade creditor. As such they should not receive notification of the insolvency order prior to the report to creditors being dispatched, unless there are special circumstances, such as the continuation of a business or where complete information is received with account numbers, addresses, etc.
xviii Water supply – water supply company
(Amended June 2008)
In many areas of the Country the provision of water services is still limited to a very small number of companies. Those companies would usually form part of the standard notices package used by official receivers. Some areas have two water companies operating – one for the supply of fresh water and the other for the removal and treatment of waste water. Notice should be issued to the appropriate water supply companies as soon as the relevant information (such as account numbers and/or addresses) is available.
In case of doubt the contact details of water supply companies in the UK are available at:
xix Notice to government departments
The Insolvency Claims Handling Unit deals with claims in insolvency proceedings relating to both tax and National Insurance. Details of new bankruptcy cases are automatically extracted from LOIS and sent to the Inland Revenue Insolvency Unit at Longbenton. The data is collected 3 days after it has been input onto LOIS and is sent automatically to the Inland Revenue on Monday, Tuesday and Friday. Thus, it is essential that the case name is entered onto LOIS accurately and as quickly as possible. It is no longer necessary to send a paper copy of the information.
Where the bankruptcy/company/partnership is registered for VAT, HM Revenue and Customs require form 'VAT', which is available on LOIS to be sent to HM Revenue & Customs, Insolvency Operations, 3NW, Queens Dock, Liverpool L74 4AA. Form VAT should not be sent until the information in questions 1 to 6 is available. No accompanying letter is necessary. Correspondence received without a VAT number will not be actioned and will be returned to the official receiver.
xx Trade Classifications
Details of the insolvent’s occupation or business must be recorded on LOIS by inputting a trade classification number. A list of the trade categories and their appropriate code number are held on LOIS. These details are then submitted to Headquarters via LOIS on the 1st day of the month following the making of the insolvency order. The trade classification is the only profiling statistic currently published by DTI Statistics Directorate. Trade classifications are the second most sought after figure (the first being numbers of new cases). Calls for this information are received from various parts of the world as the analysis of these statistics are used worldwide to predict trends, forecasts, etc. It is therefore imperative that they are recorded correctly.
xxi Re-direction of mail
Upon the making of a winding-up order, the OR should instruct the Post Office to re-direct the company’s mail to his/her address, except where an administrative receiver requests otherwise. Initially the re-direction should be for a period of 3 months. A separate request must be made for every address (e.g. both the registered office and any trading addresses) together with a separate one for any trading name at each address. The OR has to pay a fee for the re-direction which should be charged to the estate account.
If the OR wishes to re-direct a bankrupt’s mail, he/she must firstly obtain a court order before doing so. Details of the procedure for dealing with this are set out in Technical Notice T3/00, Re-direction of bankrupt’s post.
Notes:
Where can I find out more?
Technical Manual
Chapter 3 Initial Procedure when a winding-up order is made
Chapter 4 Initial Procedure when a bankruptcy order is made
Case Help Manual parts:
Application to Amend Description
Freehold Property: Solely owned - Registration of a bankruptcy restriction
Initial Contact in Debtor's Petition Cases
Insolvency Rules
Rules
R4.21 Transmission and advertisement of winding-up order
R6.34 Action to follow making of an order
R6.46 Action to follow making of an order
R12.10(1) Service by post
R12.19(2) Notice to sheriff/under sheriff
R13.3(3) “Give notice”, etc.- personal service
Insolvency Act 1986
Sections
130(1) Copy of winding-up order to registrar
184 Duties of sheriff
188 Notification that the company is in liquidation
233 Supplies of gas, water, electricity, etc. (company)
346 Enforcement procedures
372 Supplies of gas, water, electricity, etc. (bankruptcy)
Technical Notices:
T47/06 High Court Enforcement Officers and a change to the way that insolvency notices are sent to them'
T36/05 Introduction of revised procedures for dealing with debtor's petition cases
T26/04 The filing of restoration and winding-up orders at Companies House
T03/04 Revision to debtor's bankruptcy petition statement of affairs and preliminary information questionnaire
Management Notices:
M14/04 Procedure relating to the filing of winding-up orders with Companies House
M24/03 Inland Revenue (Consolidation of previous notices)
M70/02 Notification of winding-up orders
LOIS workbooks:
Initial Notices;
Online Forms Service and LOIS
available from OROS intranet page.
Forms to be used:
Acronym Purpose
ICON Initial Contact Form
LNI Letter to bankrupt no interview
LIC Letter where bankrupt has been seen at court or in the office
NTB1 Notice to bankrupt 1
NTB2 Notice setting out bankruptcy restrictions
LRRABO Land Registry, register BO or amend registration
NORD1 Notice of insolvency order (BO)
LCAD Letter covering advertisement
NFN1 Notice for Newspaper (BO)
GAZBKY Gazette Notice
NTSH Notice to Sheriff
PSOL Notice to Petitioning Creditors Solicitors
ORD1 Notice of winding up order
PSOL Notice to Petitioning Creditors Solicitors
NOTCH OR's Notice to Registrar of Companies
NTCO Notice to Company Officer
NTSH Notice to Sheriff
NTCWUO Notice to Company of making of winding-up order
NFN3 Notice for Newspaper (WUO)
LCAD Letter covering advertisement
Click HERE to view the Flowchart for Initial Notices and Letters
Procedure
LOIS screen references are given in brackets, e.g. (DO73).
1. Receive details of a bankruptcy or winding-up order made from the court or in the matter of a case transfer, from Petitions and Transfers Team and follow the procedure outlined in the Case Help Manual part: Initial Enquiries. If the bankruptcy order was made on a debtor's petition please follow the guidelines in the Case Help Manual part: Initial Contact.
2. Allocate or have allocated the case to an examiner and case officer. Record the allocation details on screen 91 on LOIS.
3. Check the details of the order (with the petition where available) are correct. If there are any discrepancies refer the matter immediately to your B1 or examiner.
Bankruptcy
4. Ensure that the description does not include the names of any third parties, limited companies, or prison address.
Company
5. Give details of the winding-up order to the person responsible for accessing Companies House Information System, they will obtain the following:
6. If the company has been dissolved or has been the subject of a previous winding-up order, refer the matter immediately to the examiner for their attention. Take no further action other than their instructions.
7. Check the relevant name(s) with Central Index for any previous bankruptcies or IVA.
8. Check each company officer’s name with the Register of Disqualified Directors at Companies House. Bankrupts should only be searched using this service upon request from the examiner. To do this access Companies House Information System:
9. Print any findings connected to the individual and refer to the examiner.
10. Record full details of the order on LOIS. Enter subject information on LOIS (CA02) by completing address and occupation. Add any aliases or other addresses in the appropriate field. Press F7 to add directors and addresses.
11.
Trade Classification
12.
Note: Do not select 00 temporary classification unless absolutely necessary.
CRO number
13. Complete company number in appropriate field.
Appointment and preliminary examination
14.
Letters to bankrupt/company director/partner
15. Enter DO73, type in appropriate form acronym and print letter(s).
When all forms printed
17. Check the notices for accuracy, making sure all names, addresses, numbers and dates are correct.
18. Gather together the relevant enclosures with each appropriate letter to bankrupt/company director/partner. These are listed on the form.
19. Retrieve form LCAD (Letter covering advert) and secure to the appropriate notice of order for newspaper NFN1 (bankruptcy order or NFN3 winding-up order). Send via advertising agents.
Upon receipt of 3 sealed copies of the winding-up order from court
22. From Document Production (DO73) obtain forms NTCO (Notice to company officer) and NOTCH (Notice to Companies House)
23. Attach a sealed copy of the winding-up order to each of the forms. Send NTCO to the company secretary at the registered office or last known trading address.
24. Send form NOTCH to Companies House with attached copy of winding-up order.
25. Retain the final sealed copy for the OR’s file.